Posts tagged "project"

This quarter has posted some of the highest and lowest numbers we have seen since 2012. In Central Pennsylvania’s local retail real estate market, vacancy rate is low, rental rate is high and both net absorption and total RBA have increased. But overall, what does this tell us about the state of our economy and what we can expect in future quarters?

Let’s take a closer look at some of the record-setting numbers we experienced in Central Pennsylvania’s retail real estate market in 2016’s second quarter and what they mean to the health of the economy.

Select Year-to-Date Deliveries:

Coming in at number three on the list of select year-to-date deliveries is the retail property located at I-81 and Walker Road in Chambersburg. Phase I and II, delivered in Q1 2016, total 109,237 square-feet of space that is 92% leased (44,000 square-feet with 4,400 square-feet vacant). Some of the major tenants include Kohl’s, Target, Giant, Red Robin, Staples, PetSmart, Michael’s, Olive Garden, VisionWorks, ATT&T and many more. Palisades Development, LLC are currently processing LOIs for the remaining space. Phase III is planned and construction will proceed when leasing warrants.

At number 15 on CoStar’s list, is another Palisades Development, LCC retail property located at 968 Norland Avenue in Chambersburg. This 10,800 square-foot building is 100% occupied and was also delivered in Q1 2016.

Select Top Retail Leases:

On the list of Select Top Retail Leases, Harrisburg area east claimed the top spot. Listed at number one is the Harrisburg East Shopping Center with 69,954 square-feet of space. Although not listed by CoStar’s as a “Select Top Retail Lease” for this quarter, plans are in place for the Giant currently in Colonial Commons, to make a move 0.2 miles down Jonestown Road to the Harrisburg East Shopping Center into the retail space formerly occupied by Gander Mountain. This will provide more space for Giant and is already attracting additional retail businesses nearby including a CVS Pharmacy and potentially a fast-casual restaurant, reports KIMCO, owner of the shopping center.

Select Top Sales:

Only one of the nine Select Top Sales from April 2015-June 2016 is from the Central Pennsylvania submarket. The Shoppes at Susquehanna Marketplace sold for $44,000,000 to Clarion Partners. With an RBA of 110,365 square-feet, this came at a cost of $398.68 per square foot.

Additionally, the West Porte Center, listed by CoStar as a Select Top Retail Lease, is more accurately represented as a sale. PennDOT purchased 67,126 square-feet of land for a new Amtrak station in Middletown that is expected to be finished in 2018. This is estimated to be a $32 million project which will include features like a covered pedestrian bridge to provide direct access to Penn State Harrisburg’s campus.

Absorption and Demand:

Net absorption increased this quarter from 64,467 square-feet (in Q1) to 110,449 square-feet, currently. Total RBA also increased, though just slightly, from 88,822,714 square-feet (in Q1) to 88,854,312 square-feet, currently. Six buildings were delivered with a total RBA of 31,598 square-feet. Additionally, five buildings are under construction.

Vacancy:

This quarter, the vacancy rate decreased by 0.1% to 4.7%. This once again matches the vacancy rate of Q4 2015, which is the lowest rate the Central PA submarket has experienced since prior to Q3 2012.

Rental Rate:

The quoted rental rate increased this quarter by $0.11 to $12.00. This is the highest price per square-foot the local retail real estate market has experienced since prior to Q3 2012.

Our Summary/Analysis:

Q2 2016 provided to be an exciting and record-setting quarter for Central Pennsylvania’s retail real estate market. We experienced a recent record low for vacancy rate at 4.7% and a recent record high for quoted rental rate at $12.00 per square-foot. These two trends go hand in hand, so it’s no surprise they would correlate together.

Another positive indicator for the health of the retail real estate market is the increase in net absorption and total RBA. Though neither were record-setting per se, net absorption nearly doubled in a single quarter which is impressive in its own right. It’s safe to say that the market is growing in demand, increasing in price and is able to absorb the new buildings that have been delivered.

What trend do you think will have the greatest impact on the Central Pennsylvania retail market? Share your insight by commenting below!

In third quarter 2015, the Central Pennsylvania submarket for commercial office space showed some positive trends for growth and demand. We have four projects under construction that will deliver more than 400,000 square-feet to the market within the coming year, with a majority of this space already preleased.

However, this promising news for the market is tempered by the fact that many tenants will vacate other office space within the Central Pennsylvania market to occupy these newly constructed office buildings. How will this impact net absorption and vacancy rates? Let’s first take a look at the data for third quarter 2015 and apply this toward what we can expect to see in the future.

Select Top Under Construction Properties

Currently four different commercial office properties are under construction in the Central Pennsylvania submarket. The Cornwall Health Center, located in Harrisburg Area East, broke ground in fourth quarter 2014 and is scheduled to be delivered in fourth quarter 2015. It has an RBA of 54,234 square-feet and is 100% preleased. The TecPort Business Campus – Building A broke ground this quarter and is scheduled to be delivered in third quarter 2016. It has an RBA of 7,590 square-feet. It is not preleased and its quoted rental rate is listed as negotiable.

Additionally, a Class A office space project is under construction at the intersection of Carlisle Pike and Hogestown Road. The two buildings that make up this project have a combined 259,000 square-feet of space are expected to be completed in spring 2016. Finally, there is Class B office space at 1250 Camp Hill Bypass that is under construction. Its 82,000 square-feet of space is 100% preleased.

Select Deliveries this Quarter:

Although four of the top 15 Select Year-to-Date Deliveries in 2015 were from the Central Pennsylvania submarket, just one was newly delivered in third quarter 2015. The Vista Plaza consists of three floors and 32,500 square-feet of office space. It is 45% occupied and is currently priced at $21.23 per square-foot. ECI Constuction, LLC completed the new addition to Vista Plaza on Manor Drive in Mechanicsburg, PA. The addition nearly doubled the original square footage of the building by adding a new wing to match the existing wing. Some of the current tenants include Duck Donuts and MS Consulting, Inc.

Rental Rates:

This quarter showed an increase in quoted rental rates. The current price of $17.14 per square-foot is a $0.07 increase from last quarter and the highest rate we have seen since prior to 2011.

Vacancy:

In third quarter 2015, the vacancy rate in the Central Pennsylvania submarket for office space decreased from 7.8% to 7.5%. The vacant square-footage also decreased from 4,120,331 square-feet to 3,962,599 square-feet.

Absorption and Demand:

With one more building being delivered to the market this quarter, the total RBA increased to 52,581,663 square-feet. Net absorption also experienced a substantial increase, more than tripling last quarter’s 50,466 square-feet to the 190,232 square-feet that closed out third quarter 2015. But take note, both net absorption and vacancy rates will soon be greatly impacted by the 400,000+ square-feet that will be delivered to the market in the next year!

Our Summary/Analysis:

Central Pennsylvania has four under-construction office space projects that have a combined 402,824 square-feet of space that is soon to be delivered to the market. As new inventory is added, with many tenants vacating existing space in Central Pennsylvania to do so, we can expect this to impact net absorption and vacancy rates significantly.

It will be important to closely watch this data over the coming quarters as some of these large projects reach completion. As a result, we expect net absorption to drop back into the negatives. Also, we expect vacancy rates to rise as high as 8.1% (assuming no outside business move into the market or existing businesses expand which has not been the trend in 2015, but was in 2014). Quoted rental rates may also dip because of this increase in vacancy.

While new construction certainly has its benefits, adding this much square-footage in such a short amount of time to the market can have some not so desirable effects from the standpoint of landlords and sellers. On the flip side, businesses looking to move or expand within Central Pennsylvania should be encouraged by the larger and more competitive selection of space available.

How do you anticipate new office space construction impacting the Central Pennsylvania market into the future? Share your personal insights – or ask a question by commenting below!

A joint venture, three years in the making, between Omni Realty Group and Triple Crown Corporation will officially open its doors to a premiere medical facility in Perry County.

Outside the Medical Professional Center of Newport

This space will house state of the art imaging including MRI, CT, Mammography and X-Ray; laboratory services; cardiology care and cardiology diagnostic testing; and physician specialists – including endocrinology, obstetrics/gynecology, orthopedics, urology and others.

State-of-the-art medical equipment is one of the many benefits the Medical Professional Center of Newport brings to Perry County.

This major project began in January 2012 when Mike Kushner, owner of Omni Realty began researching possible locations for the facility. One of the biggest challenges was finding a well-located tract of land with public water and sewer in Perry County’s semi-rural areas. While it took some time to locate the right land for this project, it was also one of the most critical details to secure.

Mike was successful in finding the ideal location for the facility, named The Medical Professional Center of Newport, on Bretz Court off of Shortcut Road in Howe Township. The new space will allow for many healthcare professionals to move into a shared space that will make quality healthcare more convenient and accessible for Perry County residents.

A look at the community gathering area inside the Medical Professional Center of Newport

“PinnacleHealth is pleased to partner with other healthcare providers in Newport to bring expanded and comprehensive outpatient healthcare to Perry County residents,” states Michael A. Young, president and CEO for PinnacleHealth. “Adding increased access to primary care and outpatient services is part of PinnacleHealth’s implementation plan based on the recent Community Health Needs Assessment completed last year.”

PinnacleHealth FamilyCare, who has operated a family practice presence in Newport for many years, will relocate from its office at 28 Shortcut Road and occupy 20,000 square-feet of this new space. Two additional medical office condos have been built and sold to local practitioners, Sisson-Boyer Eyecare, LLC and Daniel Hengst, DMD, Dentistry. Upon opening, 100 percent of this facility will be occupied by medical professionals.

Inside the new dentist office located within the Medical Professional Center of Newport

The Medical Professional Center of Newport exemplifies an emerging trend in healthcare real estate strategies which is to develop a hub and spoke healthcare delivery model. The center will provide a central location for a majority of common healthcare needs. Perry County residents will now be able to receive primary care, specialty care, imaging and laboratory services at a single facility which will increase efficiencies and service of care.

What are your thoughts on this new facility opening in Perry County, Pennsylvania? Share your opinion by commenting below!